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tv   Fast Money Halftime Report  CNBC  April 25, 2012 12:00pm-1:00pm EDT

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ten years so i think you should be happy and hope the managements of these companies get it right. >> gary, our thanks to you today. very much, gary kaminsky. markets softened, dow up 68, does it for us. let's hit the "fast money halftime report" back at hq. >> rally across wall street as carl said we have pulled off the best levels of the day. techs leading the way not surprisingly after apple's blow-out and boeing is helping. do you good for 68 points. gold and oil, those two, gold could be active given it is a fed day holding steady not moving in either direction. there's crude oil down a fracti fractionally, as well. top stories we're following on "the halftime show." all eyes on the fed. special coverage at 12:15. pimco's bill gross and ken volpert and trading the apple
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halo talking to the analyst who dared to downgrade ahead. braking down the industrial weakness. welcome to "fast money halftime report." lots to trade and let's start doing it with apple shareholders have been on a wild ride around the latest report but the "fast money" traders gave you a playbook days before earnings. take a listen. >> this is exactly what people have been waiting for. no, i'm waiting for a pullback and get it too scared to jump in. happened the other day when we traded down to 571 and closed above 600. >> play this range and three more days to do it. friday, monday, tuesday, buy it below the 578 and sell it above the 610 level. >> if you followed that advice, you made money. now that we are at 6$610 what d you do now, guy?
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>> take profits. the quarter was unbelievable. guidance, a lot of people talk about wasn't fantastic. >> always is conservative. >> remain in this range so looked scary the other day, no question about it. we said look for the flush. we're not geniuses but got to trade what the market gives you. piling into here for a trade, i think you're late. >> wasn't the thing that looked scary a head fake, right? there were concerns about the technical breakdowns, reached its 50-day moving average and slowdown in ipad sales and iphone. you got none of that. in fact, they blew away expectations on almost every single metric that wall street cares about. >> i don't think there was ever a concern on that front. fundamentals have been consistently strong. >> there were whispers in the market that iphone sales were going to disappoint and they did not. >> i don't think they were logical. why would they do that ahead of an iphone 5 launch and pull themselves out of the
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competitive environment to sell that product? so i think the fundamentals have been consistently strong. i think it's a great call on the part of pete and guy and jon to buy apple at the bottom of the range. i wasn't telling you to do that. technically the technicals suggested that apple was challenged over the last couple of days, today now you've balanced the fundamentals with the technicals and have a stock at 611 and i really think the impact is on the broad market itself because internally i don't think it's trading all that well if you pull apple out of the story today. >> all right. not everyone is jumping on the apple bandwagon. bti analyst walter downgraded them and after yesterday's report still didn't think the company is a buy. let's bring back in mr. pisac for a reaction to the earnings report. i don't know. you have egg on your face, omelet all over your suit. how do you feel today. >> not at all. i think if you had read the downgrade we said specifically
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china was going to deliver a strong quarter which it did. why we downgraded have to do with what operators are doing as far as upgrade rates and how it will impact them forward and subsequent to the down grade you saw that theme play out at verizon, at at&t and sprint had an upgrade rate that was lower than expected for the company. so the same issues take place. i mean like i said we certainly expected china to deliver the strong quarter. there was some incremental upside. part of it was an addition of a 2.6 million phones into the channel. that certainly helped deliver a 35 million iphone number versus 343 million for the quarter. >> a couple places to go. china first. your note today, it appears china will cool from the initial surge. want to give you a comment from apple from the call yesterday in which the company says, this is from peter oppenheimer. we continue to see tremendous
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momentum in greater china where iphone sales were five times the level of the year-ago quarter. the bottom line is they don't see china moderating at all. if anything, the expectations are it would continue to pick up. why should we believe that you think it would cool? >> well, that's not what i heard on the call. what he said on the call was the supply/demand imbalance was no longer occurring in china and they're looking for a sequential decline. so if you look at what happened in china, two of the smaller operators that are predominantly post paid operators, 50% of one guy's business, 75% of the other ones that launched the iphone in january then march that delivered a lot of pent-up demand and should have been expected by investors. when you go forward after you get the post paid customers, what happens in the next quarter? a ton of phones sold at at&t and verizon and sprint. what happened to the quarter after that, they went down sequentially, 26% at verizon, 40% plus at at&t. so there's always an initial
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surge in any market when a new product launches. the question is what happens next quarter? like i said on the call he specifically said that the supply/demand imbalance has been corrected in china. >> dr. j. >> what would you say as far as the biggest carrier in china when they start ramping with the iphone sales and/or the anticipation of the iphone 5? >> china mobile is the largest operator. 66% share in that market. the difference between them and the other two who launched in this first quarter they're predominantly prepaid so the difference between the two, the post paid operator lets you buy a phone really cheap because they're subsidizing it when they sign you on a to a 24-month contract. customers will have to prepay $600. of the billions that live in china are there that can pay $600? absolutely. people in new york lined up at the end of the year to ship phones to china to sell at even a higher price than $600.
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once you get past the high-end market how many chinese people will afford a $600, $700, $800 phone. >> i'd say about 25 million. >> for next quarter? >> perhaps. but they can't make that many given the global supply, can't make as many as they will ship given the launch of the iphone 5. >> in the case of china mobile, iphone 5 -- is qualcomm going to have those specific ships to offer their faster version of lte? >> but, walter, you see nothing and this has to be the last question, we have to run ahead of the fed. sticking with your neutral rating, really? >> we do have sell ratings and buy ratings so it's not like we're saying short the stock at least at this level. but, listen, the next two quarter as head of that huge iphone 5 launch and some are expecting great launch 6 an apple tv, iphone sales should
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probably slow. >> 27.5 million for the next quarter well below the street expectations. >> thanks for having me. >> second derivative numbers. cortez, noted apple contrarian, are you a believer now and would you buy some now? >> no, i would not. i've often said if you believe in apple i think you have to buy apple because it does not typically drag its vendors with it. one of the reasons apple is apple because it squeezes its counterparts so i think in apple obviously huge move, the empire strikes back and important to remember looking over the last year we have had five 10% or greater corrections in apple and i know because i've participated in several of them including this one, so is this stock a quality name? absolutely but does it have giant wooshes to the downside, yes. the stock is where it was a week ago. it's still well below where it was two weeks ago, to me it's in
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noman's land. >> not that many big whooshes. >> it's had five in a year. that's very significant. >> staying on that. where are you. >> it reports earnings 70% of its revenues derived directly from apple. having a nice strong rally today, i think this has the most potential upside of. after earnings you get a pullback you still buy it. >> financials are lagging in the rally today. lagging since earnings have begun and goldman sachs sales are lower despite blankfein saying he has no plans to leave the firm. take a listen to what he said earlier. >> i have no plans to leave. i read the same papers you do. i just don't know -- you may think they get it from me. i could tell you i have no idea where they get it from. so my plan is -- this is a terrific job. it's interesting. you get to be in a lot of
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different industries. i get tremendous support. >> no plans to leave says mr. blankfein to gary kaminsky. is that good or bad news. >> good news because he has managed in a difficult environment. we all know that. the departure of that employee that really ripped the firm. a big negative but addressed that with the interview with gary as well and said goldman is evolving. i think he is evolving and doing a great job managing risk at goldman sachs and the real question was, going forward five ye years, ten year, how much are the changes going to affect their ability to earn forward. >> caterpillar, shares falling 4% dragging on the dow despite a strong quarter. our next guest talks about it and the company's forecast. a buy rating on the stock and comments from the earnings, economies in europe, china, brazil slowed. sales in china were off in the first quarter, likely down for
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the full year. how much of a problem is that for cat? >> well, it's a big headline problem. i mean part of the issue is cat telling people how great china is and how strong they are there. turns out it's about 3% of overall sales and trying to tell people not to pay so much attention to it. it's more of a headline problem than an earnings problem. >> what do you do with the stock. >> i think you buy it. look, almost all of the end markets these guys touch, u.s. construction, housing starts, you know, construction in europe, all very near low levels si -- you'll have bounces but overall still early in this process. >> steve, sal situations are compelling but the stock hasn't traded particularly well for the last couple of months and although your point is well taken about china not being that huge. if china slows people will sell
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it regardless. any more room on the downside? my sense is we could touch double digits -- >> maybe slightly buts that a near term and buying that dip all day but at the end of the day we have headline issues, a lot of the growth is in china and in brazil and those two things are slowing. now we've seen interest rates start to come down in brazil and a little loosening in china. who wants to bet against china long term, but near term i take your point. >> steve, good to have you on the show. thanks so much. on the other side of the break, special coverage of the fed's decision covered from every angle. bill gross and ken volpert.
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>> steve, good to have you o
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happy fed day, america. special days call for special shows so we are breaking into "the halftime report" with a fedex traf began have. this fed statement and 2:15 press conference are big. increased tension among members of the fed board of governors most agreeing with bernanke.
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but jeff lacker believes we will need to raise rates before that because downside risks are moderating and inflation is close to the fed's goal. with that in mind here are the big questions surrounding the fed right now as we head into the statement and then the press conference at the 2:00 hour. do the members see a slowdown ahead? the reason why they might? because we have had a jump in initial jobless claims. and markets may look for the fed to explain that. also, the weather could play a role. yeah, the weather. because some economists are blaming recent data points on the bizarre weather we have had both good and bad. also, will the fed keep bond buying, aka operation twist going past june, will that extend to bring down the long end of the rate curve? also the big daddy question everybody wants answered to qe3 or not to qe3? do the problems in europe and some of the job weakness we just referenced here merit a third round of quantitative easing, k
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aka credit easing, aka to some of you money printing. clarity on some if not all of these today so let us get right to our special fed show and get to some answers. we'll begin with steve liesman down in washington, d.c. on the roof of the federal reserve. steve, what are you expecting, sir? >> well, we're waiting for that statement at 12:30 and i think you're right, brian, i think the meeting finds them in a stalemate. growth has slowed somewhat but not enough to prompt new qe but not enough to dial back on the accommodative policy it has right now. what are some of the keys to this meeting expanding on points you made, softer data since the last meeting. does the fed still describe the economy as being on firmer footing. is the labor market still improving gradually as it said last time. more hawkish rhetoric suggesting that additional easing only if the economy worsens from the current forecast. is a political window closing? twist ends in june. is the fed going to be
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uncomfortable make agent close call on another program after june as the political season heightens? finally, watch the forecast. that's going to be the key to the -- to what the policy is and i want to take a look at the last forecast which economists are really bearing in on. look at that number 5 in the middle under 2014. 5 fed officials said the first hike would come in 2014. to the left six said before 2014. if that number moves to the left and if more officials think tightening is coming earlier than 2014 that guidance could be in danger. the guidance that the fed has rested a lot of what it said. more specifics about the forecast and the fed is really not in tune with where the economy has been. when it comes to gdp, it's been undershooting. gdp right now running ahead of the average fomc forecast. unemployment is doing better than the average forecast and
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inflation doing worse so add all that up together, brian, the equation is not that complicated. growth running hotter. inflation a little hotter. unemployment a little better that is not the prerequisite at least right now for the ned to do more. >> steve, stick around, of course, as we head to our great fed panel, we might break out the box. always a chance. a look at how stocks and bonds faring. to the markets, i want to begin with the nasdaq apple, huge story, 2% gain nearly in the nasdaq 100 composite, apple a big part. s&p up 1%. the dow up 0.5%. keep those in mind. we'll check them after the fed statement to see what if any reaction we get. bond market, we're still seeing near historical lows in the ten-year treasury. we've come up a little. look at the yield, folk, not seeing a big whole move there, about 2%, keep that number in mind, some people say we're on
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our way to 1%. some people said we've seen the lows. you know who knows? bill gross, the founder and co-cio of pimco, co-founded it back in 1971 and charles reinhart, morgan stanley smith barn barney's investment officer and steve liesman still with us. bill, you heard from me at the top. what is your expectation from the fomc. >> i like what you both said. steve talked about a stalemate. i'd suggest the fed's hiberna hibernating at least for today with very little change and a very low pulse statement that suggests the possibility, but not the probability of additional qe. i think ultimately as we approach the june meeting, however, i think the economy and financial markets will reflect the need for more stimulus and that's not my or the fed's favorite scenario because it has negative as wells positive repercussions but i think its inevitability is in our stars
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and tea leaves i think as shakespeare might say within ourselves. >> do you agree. >> largely, yes. we think today they will announce no policy changes. they'll acknowledge in the statement that there's moderate growth that has slowed a bit recently. that inflation is subdued. they might also speak to some of the risks such as a recent slowing in the growth rate of the labor market and in europe but at the end of the day, we're trying to -- if the economy continues to moderate then the likelihood of quantitative ease is greater in the june meeting than today. >> good point. talk about jeff lacker. you know him well. sole dissenting voice in the last -- do you believe the problems in europe and maybe initial jobless claims weakening will change him back to a dove? >> no, definitely not a dove but it's interesting, you can listen to just one side in the fed
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debate and get an idea where the center is. laxer and hawks like him have become more stride dent in the intervening period. doves like dudley and yellen have become less and the center has moved. the center was leaning towards this idea of we'll do qe even if the forecast ends up the way we want. that turned from even if to only if the forecast ends up worse than we expect and you've seen everybody move. lacker has gotten more stride dent, the doves less dovish and bernanke is right there in the middle say i'm in the only if camp. >> if you were the fed chairman and who know, you might be someday looking at the uk in recession, spain in recession, dutch government out, how much is europe playing into your decisionmaking if at all on the fed board today? >> well, i think they do have to be very careful. you know, bernanke always looks to japan but euro land poses a similar problem in terms of
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recession certainly enpotential lost decade going forward. you know, i think, brian, this question in terms of the fed is really one of flows versus stocks, and that's a complicated equation, but a flow statement might basically say who will buy these treasury bonds if the fed doesn't. that would be our view at pimco. you know, the fed's view basically is one of stock, they basically compare it to -- basically compare it to a wine cellar in which a lot of wine has been drunk in the last few months and has to be replaced so i think the argument critically hinges on whether it's a stock or a flow type of situation going forward. >> we'll dive into more. we have a lot to do. a quick break. we're minute as way from finding out exactly what the fed will do and say. it could have a big impact on your money. we've got steve, bill, charles, ken will come along and even the octo box.
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statement on interest rates and policy, let us add more voices to the discussion and bring in ken volper at vanguard. he joins us with bill gross as is charles reinhard and steve liesman as well. ken, when i look at this market and i look at a 20-year chart. it looks like technically it's headed to 1%. do you think we'll hit that, why or why not on the treasury. >> i don't expect 10%. part of the reason why is because, you know, fed -- inflation expectations staying up around 2% or higher. i think for nominal rates to get to 1% the fed would have to be way behind in terms of easing and really bring about, you know, extreme economic weakness and i don't see that happening. >> bill gross, do you see that happening because the chart sure looks like that's where the ten-year is headed. >> i compare this market starting in 1981 at 14% on the
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long bond and maybe the ten-year to a big smile. you know, it's come down on the left side of that smile, you know, it's going to go back up on the right side of that smile over the next 10 to 15 years but for the next two or three, you know, we're basically going to stay where we are at 2% for the ten-year and maybe around 85 basis points for the five-year which is where they were auctioned this morning. >> interesting, charles, we had a discussion with jim bianco, the bond researcher in chicago and he brought up what i thought was an excellent point which is that the market misunderstands who buys treasuries. it's not the retail public but the fed and the bank of japan and central banks that have to buy our debt at this point given the monetary conditions around the world which is why he thinks we will see 1%. is he wrong? who is buying treasuries right now? >> well, with ken and with bill, i'll agree and make it three that i don't think the yield is going to 1% on the ten-year
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treasury. a lot of institutions like you mentioned are the end owners, central banks around the world. a lot is in public hands, that being said, we don't think that treasuries and other developed countries, central banks for that matter, their bond yields offer a particularly good value relative to inflation and so while these institutions hold we're recommending an underweight position for our clients. >> charles, you guys have taken risk off the table recently so what does that mean? ditching the stocks in favor of bonds. >> what we think is that you have to model your portfolio so that it can weather adverse as well as favorable conditions, that means a combination of safer investments along with risk assets such as equities and investment grade corporate bonds and some other investments. >> you know, ken, i might have to jump in. we could get the fed statement any second. if we do, my apologies. what are you recommending to guard a fixed income. some would argue ben bernanke and the fed have wiped out all hope of income for america's
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retirees. >> we like corporate credit. 150 to 200 basis points over treasuries and corporate america is still in very good shape in terms of their financial ratios so we like investment grade corporate bonds and the short and intermediate term part of the market. >> if we say that what do you see for gdp because nominal bond yields tend to track. what do you see happening with gdp. >> we see it continuing to grow at around 2% to 3%. we don't see any kind of excesses that are going to create the fed having to tighten any time in the next couple of years. we think it's a pretty good situation for corporate america and for corporate bonds just kind of a slow 2% to 3% kind of p grronment. >> bill, you've written we need to be on the shorter end of the curve or at least a duration so that said where are you putting your clients' money that you see value in. >> brian, that's right of the five-year. i'll get cut off by the fed. you want to buy a five-year at 85 basis points, forget about it
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for the next year, it becomes a four-year at 60 basis points that produces a one point appreciation in terms of price that produces a 2% return, so look to the coffee can portfolio over the next 12 months. >> you know, bill, i get the impression you might have done this before knowing the fed. we have a little bit of delay. no set time for the fed. maybe the fax machine got stuck or whatever happened a couple of months ago, all right, so i'll continue to roll along with this conversation and come back to you, charles. any part of the equity spectrum? let's say they say no change in rates. any part that is a direct play off of the fed or literally all boats are being risen by this tide? >> no, i think that today remember we have the forecast later on today in the press conference which will provide more important clues than probably the statement. that said, we like emerging market equities and u.s. equities more than europe and japan and within the u.s. growth more than value and large more
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than large more than small which we think is upping the degree of quality in the portfolio. we also think there's a valuation anomaly. we think they're less expensive. we think that growth is cheap relative to value and large is cheap relative to relative to -- >> no change in interest rates. no change in interest rates. they decided to keep the target rate for the fed runsfunds rate0 or a quarter percent and a subdued outlook for inflation over the medium run are likely to warrant exceptionally low levels of the fed funds rate at least through late 2014. information received since the open market committee last met in march suggests the economy has been expanding moderately. labor market conditions have improved in recent month, the unemployment rate declined but remains elevated. household spending and business fixed investments have continued to advance. despite some signs of improvement the housing sector
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remains depressed. inflation has mixed up somewhat mainly reflecting higher prices of crude oil and gasoline. however, longer term inflation expectations have remained stable. committee expects economic growth remain moderate over coming quarters and pick up gradually. the committee anticipates the unemployment rate will decline gradually toward levels it judges to be consistent with its dual mandate. strains in global financial markets continue to pose downside risk to the outlook. the increase in oil and gasoline prices earlier this year is expected to affect inflation only temporarily. the committee anticipates subsequent inflation will run at or below the rate it judges the most consistent with its dual mandate. deciding to continue its program to extend the average maturity of its holdings and securities and announce in september is maintaining its existing policies reinvesting principal payments for its holdings of agency debt and mortgage backed securities and agency mortgage
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backed securities and of rolling over treasury securities at auction. there was a dissenting vote, jeffrey lacker who does not anticipate that economic congresss are likely to warrant excepti exceptionally low levels of the fed runs funds rate, 2014. this is hampton pearson reporting live. >> thanks. thanks for being patient. looks like the statement is nearly exact, nearly exactly the same as the last one although they talked about the financial conditions a bit and also maybe a little bit stronger on inflation. is that how you read it from listening to hampton because gold is moving? >> so i would explain this as when the oxford english dictionary is looking for an example of the word tweak is what i would say. it's a very, very modest downward tweak on the economy saying it's been expanding moderately from on firmer footing, labor market conditions have improved rather than say improving gradually. i don't even know what to do
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with that one. a bit more on inflation. if i'm not mistaken financial strains after being dropped from the prior statement made a return cameo appearance. i think the bottom line here, if you're looking for what is the takeaway, it's ulth maltly the fed is not budged on what was the market understanding before the event and that is that the fed is not likely at this point under the current forecast to come in and do additional easing. the rest is commentary as a famous prophet once said. >> let's talk a little more about what is expected at the press conference which is really where much of the news is going to be and that could be seen by the way at 2:00 p.m. on "street signs." bob, haven't seen a lot of movement in stocks. will the fed destroy apple iphone sales. >> that's the big question here. i think the big -- the big issue here, brian, no comment on whether the recentle economic weakness is affecting the fed's
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forecast. they said nothing. that was the number one question on the floor but no acknowledgement on the recent bumpiness. we didn't move on the stock market much. bank stocks didn't move. interest rate sensitive stocks didn't move. the dollar moved up a little. gold to the downside and the press conference is where we might get firework, steve, i'm wondering other than the choppy economic data, the guys here want to know about whether the fed will want to talk more about improving communications and want to know will the fed tell us what data they're using to decide how they're going to shift their monetary policy at all? do you think we'll get any more clarification on that, steve. >> interesting question, bob. i will tell you the fed thinks it has improved communication. it's offered more data. we're getting those second round of interest rate forecasts for the first time here. and we're also getting the guidance in the statement. and i've heard a lot of criticism that this is actually adding to confusion. we're going to ask, i'm sure the
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fed chairman a little what is it going to take to make you move? he has been reluctant and there are a lot of reasons for that you can read in the minutes and commentary why he doesn't want to put absolute numbers on it. came forward with the inflation target, another thing they think added to clarity but no -- >> i would add that at least amongst down here when they talk about it, the general feeling the members themselves of the fed couldn't come to agreement on what specific targets they might want to use that would affect their policy. that's the biggest problem of all, would you agree? >> yeah. >> i don't think this is that simple, guy. that difficult, guys. at the end of the day, a very modest slowing in growth and not enough to bring the fed back in. we did three in the fourth quarter. we'll do three in the first quarter. we're headed 27 in the second. you can't do a major qe policy under those numbers until the situation defines itself. >> guys, we'll get to rick santelli. are we seeing any moves in
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yields on the ten-year or euro dollar? >> yes, and i'll go through every maturity. two-, 27the statement now 28. five-year 85, now at 87. the ten-year was around 197. it's now at 2%. we haven't closed with a 2 handle since the 12th of april but 30-year bond wins the bob by prize? why it was around 3.12. now 3.16 because nothing was mentioned about regarding the twist. the about a dime, 0.1 cent and euro currency showing arounds 130, 205 around 130, 1.87. the 30-year bond got the movement in my back yard. >> may not have a chuck berry fed for much longer. quick break but when we come back i'll ask bill gross why he wrote we need to escape and he wasn't talking about the pena colada song. ina
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all right. let's bring back our panel, bill gross, charles reinhard and ken
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volper. i teased the following, basically why did bill write that we need to escape? all right, bill, you made references in your last piece to the great escape, the movie but we have to escape today's repression with regards to living conditions. what did you mean by that? >> well, investors are being repressed in terms of interest rates primarily. stock prices are reflecting that, as well. basically, you know, 25 basis points for fed funds or 28 for a two-year treasury on up the curve. basically these are 2% or 3% lower than historical measurements and so investors need to escape. they don't -- you know simply accept, you know, their plight. they need to tunnel out from underneath these low interest rates and produce returns of 2%, 3%, 4 prshgs that they're somewhat used to. duty bound on the part of investors not to accept these
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low money market funds and low treasury yields and produce higher returns, doesn't necessarily mean, brian, we take a lot of risk but does mean we look at strategies that might promote higher returns relative to what is being offered us. >> you know, a great point. as a former new jersey transit daily train rider i always wondered why people took the lousy service delays and sat there. it's kind of like the bond market, to bill's point, we're not getting anything hardly. corporate bonds, corporate credit, maybe 6%, 7% if you want to get risky. why are people taking it and are your clients getting frustrated with the federal reserve? >> well, i think investors are taking it mainly because they're afraid of the future. a lot of uncertainty around growth. a lot of uncertainty around the debt levels and they see potential head winds to growth that could, you know, create risk to them from an investment standpoint. so i think over time as i think part of the financial repression is ultimately to lower the debt burden by basically taking from
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those who have saved and it's something that obviously the fed is trying to create as a way of helping to reduce the debt burden and it brings real interest rates to negative, negative levels that can help stimulate the economy and i think we'll see it for awhile to come. although the corporate market, i do say, still gives you pretty good returns if the many economy does recover and even more positive returns. >> we got to quickly wrap. who am i to argue with ken volper, even negative real rates didn't help japan return to growth. will it, the united states? >> it will help. we do need to revive the pace of economic growth and it is difficult to get yield productivity out of i portfolio so we need to think about things differently including dividend yielding stocks and also addressing our portfolios in a way where we plan to schedule for withdrawals in the future in addition to collecting income. >> charles reinhard, ken volper,
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bill gross, thank you for coming on our fed special and thanks for watching. the fed coverage not over, the q&a session more important than the statement. 2:00 p.m., "street signs." ben bernanke news conference. john's interview with tim geithner on "the closing bell" at 4:30. "fast money" returns after this short break. if you are one of the millions of men who have used androgel 1%, there's big news. presenting androgel 1.62%.
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gold and silver hitting session lows after the fed statement. dennis garthman joining us on the last line with more instant reaction. dennis, help me understand. on march 13th, the day of the last fed meeting when the statement was nearly identical to what we just got gold initially spiked. wouldn't you think, okay, if rates remain low, the dollar will remain low, gold would perhaps be higher yet you're seeing gold and silver sell off. tell me why and one of our e-mailers said now we know that gold bugs are not paying attention if you see this move. >> i think that's a good comment. now we see that they're not paying attention. the fed has effectively taken qe3 off the table for at least another month and probably for the foreseeable future. haven't see any real change in the fomc statement and let's wait till we see what happens in the afternoon when dr. bernanke makes his postmotoring press conference. he may offer something new but on balance the fed was talking
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about inflation remaining subdued. that it was concerned about circumstances overseas but there was no discussion of qe3 and without that, off goes the gold market. i think you're very wise in noting gold was trading 16.40 in the spot before the report. it fell all the way down to 16.26. it's bouncing marginally from there and i think the gold market -- i think the gold market tends to be a wise market and breaking on the proper understanding of the fact that qe3 has probably at best been put off for several -- many months anime be off the table for a long while. >> cortes, you're short silver. presumably you would be short gold as well so do you agree with dennis. >> absolutely but i think silver is worse. it's been underperforming gold for months and i think it's important to note silver today briefly broke on the future's $30, something it hasn't done for three months so the think is situation is worsening for all metals from copper to aluminum
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to precious metals but i am most focused on silver. the fed is not going to qe before the election unless something disastrous happens and in that disastrous happens. and in that scenario silver is very overbought here. i might add to shorts again today. the inverse etf. >> steve's a younger man. he can trade silver. i'm an old bug. the random noise in the silver market is a little too exciting for me. >> dennis, i have to let you run because of the breaking news with the fed. we appreciate your time as always. >> glad to be on. thank you, judge. >> coming up, more ways to trade the fed decision today. and we're trading your tweets. send them in. we'll be right back. when thic to provide a better benefits package... oahhh! [ male announcer ] it made a big splash with the employees. [ duck yelling ] [ male announcer ] find out more at... [ duck ] aflac! [ male announcer ] ♪ ha ha! standard keyless access,
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and today on "power lunch," what will the fed forecast be? what will ben bernanke say? and how can you make money? gary will be back to break down his exclusive interview with lloyd blankfein. and we will get you ahead of today's earnings from las vegas sands. that and more today on "power lunch." now back to scott and the fast half. >> ty, look forward to that. thanks so much. let's get your realtime change from jim yurio. he was buying the short treasury etf. that's the tbt, talking about it all the time. ahead of the fed decision. let's find out what he's doing now. jimmy, your reaction to virtually the same statement. >> absolutely. there's a couple things we know for sure, and that's the fed
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doesn't want and has no immediate attention of embarking on a qe-3. to me that's a huge deal. sponsorship long end of the treasury curve is what's kept rates at this level. >> right. >> to me it seems like rates should be going up and that's why i added to the small position to see how the market was trading. i look at it this way. the fed's telling you move further up the risk spectrum. go some place else. you can buy stocks. if things start to really get out of hand, we're there. we will come back in. we just don't plan on doing it now. to me that seems like recipe for curve steepening and that's why i like the tbt. >> making a nice move to the upside. cortes, what's your comment here? >> i think the rates are fairly priced. i think 2% is where the 10-year belongs. it's where we've spent most of this year in fact. to me a trade that doesn't have fireworks in either direction. jim, do you think we can see a significant rise in rates? >> no. i'm not saying significant.
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2.30, 2.40, where we were a couple weeks ago. fairly priced, if it wasn't for the fed would you or i want to tie up money at 2%. there's a lot of things out there that are scary. but are things more scary today than they've been at any time within the last two years? that's what rates are telling us. and i don't believe it. >> jimmy, good to talk to you as always. >> thanks. >> time to talk pops and drops. lorillard dropping 4%. cortes. >> i'm afraid the guy has given up smoking newports. i love tobacco, the dividend yield and the have-to. i own altria. >> joe. >> q-1 was in line, q-2 guidance is soft. i think the real concern with baidu, margins will struggle. >> shares down big after the bell. continuing that slide today. norfolk southern.
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>> shipping those cigarettes that i've never smoked in my life there, steve cortes. the play is kansas city. all-time high in ksu. time to take money off. >> gmc popping 11%. doc. >> very strong move. great earnings blowout and nice guidance. shows the consumers are out spending. very nice move out of gmc today. >> back in a couple on the other side of the break. final trades from the halftime team. what the world wants to know and share is here.
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demand media expands on the big board. the teacher that comes to mind for me is my high school math teacher, dr. gilmore.
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i mean he could teach. he was there for us, even if we needed him in college. you could call him, you had his phone number. he was just focused on making sure we were gonna be successful. he would never give up on any of us. yeah, scott. i was just about to use... that's a bunch of ground-up paper, lad! scotts ez seed absorbs and holds water better. it's guaranteed to grow grass anywhere, even if you miss a day of watering. [ scott ] seed your lawn. seed it! ♪ ( whirring and crackling sounds ) man: assembly lines that fix themselves.
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the most innovative companies are doing things they never could before, by building on the cisco intelligent network. only hertz gives you a carfirmation. hey, this is challenger. i'll be waiting for you in stall 5. it confirms your reservation and the location your car is in, the moment you land. it's just another way you'll be traveling at the speed of hertz. i like gld. faden move to the downside. move to the upside. >> i like robert huff. good quarter. >> joey t. >> stop lower trade. >> that does it for us. don't forget to catch more "fast


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